On the initiative of the Economic Affairs Committee, the development of the Estonian enterprise environment was discussed as a matter of significant national importance in the Riigikogu today.Reports were made by Urmas Klaas, the Chairman of the Economic Affairs Committee, Toomas Luman, the Chairman of the Board of the Estonian Chamber of Commerce and Industry, and Urmas Varblane, Professor of Economics at the University of Tartu.
In his report, Urmas Klaas pointed to the question about Estonian economy in the perspective of ten and fifteen years. Klaas: “In my opinion it is important that besides our annual deliberation of the state budget we also regard Estonia as an enterprise environment and economic space in a longer perspective.” Klaas referred to the problem of production having had been too much oriented on domestic consumption in the period of economic growth. This has brought along a large amount of debt money which has been accompanied by a rapid growth of labour costs, and the growth of productivity in this background has not been proportional to the increase of salaries in recent years. Klaas said that, in the Economic Affairs Committee, agricultural producers had raised the unequal treatment of Estonian agricultural producers and the food sector in the European Union direct support system as the most acute problem. In the words of Klaas, undertakings have also warned the state for the infeasible social package and have pointed to the excessive bureaucracy. “The economic structure of Estonia has to change and the export capacity of our enterprises has to increase considerably. Increase of productivity, use of innovation, development of capacity, development of managers and employees – these are certainly key areas in this context. The need to increase cooperation and information exchange between the state, local governments and undertakings has been a topic running like a red thread through all our meetings,” said Klaas. He stressed that undertakings consider it important that the state continue strict budget policy and that taxation system be simple, transparent, motivating and treat everybody as equals. “We should not make sudden changes in taxation policy,” maintained the Chairman of the Economic Affairs Committee. Klaas also touched upon issues related to labour force market, education policy and foreign trade policy.
Toomas Luman noted in his report that, according to a study of small and medium sized enterprises, 46 per cent of undertakings found that high tax burden was the main obstacle in the development of enterprise, and 44 per cent pointed to the burdening legislation and excessive bureaucracy. Luman added that the taxation of labour force in Estonia, especially in regard of the proportion paid by employers, is one of the highest in Europe. “Therefore taxation system has to be simple for both taxpayer and tax collector. Administrative cost must not exceed receipts, as may be the case with quite a few types of taxes today, and taxation system must be transparent, motivating and treat everybody as equals,” said Luman. Luman claimed that, try as hard as they might, a great number of small-sized enterprises did not succeed to observe and comply with the constantly changing legislation. In his opinion, simplifying and introduction of automatic reporting are the only ways to overcome this problem. The representative of the Estonian Chamber of Commerce and Industry also referred to the lingering administrative reform and education reform. Luman’s proposals were: first, to preserve the general stability, predictability and simplicity of economic environment and, second, to retain the current level of taxes. Luman suggested in conclusion: “A thorough analysis has to be carried out before a Bill is proposed – a substantive assessment of impacts and additional expenses to be incurred by the society has to be an obligatory part of the proceeding and the Riigikogu should not include any Bills to its agenda unless it has been completed.”
Comments on these issues were also presented by representatives of the factions of the Riigikogu.
The Act on Amendments to the Earth’s Crust Act and the Sustainable Development Act (298 SE), initiated by the Government, the purpose of which is to add relevant provisions to the Earth’s Crust Act to ensure that the annual rate established in the Oil Shale Use National Development Plan is achieved, was passed with 72 votes in favour. The volume and trends of the use of oil shale have been agreed upon at the national level in “The Oil Shale Use National Development Plan 2008-2015”. The objective in implementation of the oil shale use development plan is to achieve the maximum limit of 15 million tons per year in oil shale mining by 2015. As the maximum annual rate of oil shale mining specified in the currently valid permits totals 23.75 million tons, the Act provides legal possibilities for reducing the annual rate set out in the permits. Also, a new section was added to the Act which provides the grant of a new mining claim in oil shale mining. 5 members of the Riigikogu voted against the Act. Nobody abstained.
The Act on Amendments to the Border Guard Service Act (269 SE), initiated by the Government, was passed with 74 votes in favour. The amendments have the objective of resolving the personnel problems of the Border Guard as soon as possible. The main focus is on improving the flexibility of the education requirements for border guards. The Act allows persons who have secondary education and who do not have vocational secondary education in border guarding or qualifications equal thereto to be appointed to the position of border guard. Also, the basis is created for counting the military rank of persons who had not completed training in border guarding as a border guard rank after completion of training in border guarding, in order to enable persons who have a military rank to enter service in the border guard. The Border Guard Service Act is amended by adding a new section which provides compensation upon transfer of a Border Guard official of to another position. Nobody voted against the Act and nobody abstained.
The Act on Amendments to the Funded Pensions Act and Associated Acts (313 SE), initiated by the Government, was passed with 73 votes in favour. The purpose of the amendments is to eliminate the bottlenecks hindering the development of the second pillar which have appeared in the contribution phase of the funded pension system, and to improve the regulation of the payment phase of the mandatory funded pension system. A more specific objective of the Act with regard to the contribution phase is to enhance the transparency of the structure of the fees relating to the pension fund and the flexibility of the rules for the exchange of units and the limitations on investment in pension funds. This creates the possibilities for unit-holders to react more effectively to changes in pension fund rules or investment results. The Act enters into force on the day following publication in the Riigi Teataja and some provisions enter into force on 1 January 2009 and 1 January 2011. Nobody voted against the Act and nobody abstained.
The first reading of the Bill on Amendments to the Deliberate Release into Environment of Genetically Modified Organisms Act (301 SE), initiated by the Estonian Green Party Faction, was concluded. The Bill was sent to the second reading.
The Equal Treatment Act (262 SE), initiated by the Estonian Reform Party Faction, the Social Democratic Party Faction and the Pro Patria and Res Publica Union Faction, was not passed in the Riigikogu. The Act required a majority vote of the members of the Riigikogu (51 votes) to be passed, but 50 members of the Riigikogu voted in favour of the Act. Nobody voted against and nobody abstained.
The Riigikogu Press Service